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Deadline Effects in Ultimatum Bargaining: An Experimental Study of Concession Sniping with Low or no Costs of Delay

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  • Werner Güth
  • Maria Vittoria Levati
  • Boris Maciejovsky

Abstract

In this paper we report an experimental study of the ultimatum game in which subjects bargain for constant and slowly decreasing pies, over 3 and 11 rounds with either constant or alternating offers. With decreasing pies efficiency requires early agreements, whereas constant pies allow for late efficiency. Slowly decreasing pies are here captured by a 10%-decrease of total rewards from the first to the last round. While in the alternating offer bargaining mode roles are exchanged from round to round, in the constant role mode the same party is constantly proposing. Participants play all games with changing partners but keep their role as (initial) proposer or responder over the entire experiment. Our findings offer institutional advice, e.g. that conflict can be avoided by role alternation and time pressure.

Suggested Citation

  • Werner Güth & Maria Vittoria Levati & Boris Maciejovsky, 2001. "Deadline Effects in Ultimatum Bargaining: An Experimental Study of Concession Sniping with Low or no Costs of Delay," Papers on Strategic Interaction 2001-01, Max Planck Institute of Economics, Strategic Interaction Group.
    • Handle: RePEc:esi:discus:2001-01
    Note: This paper is part of the EU-TMR Research Network ENDEAR (FMRX-CT98-0238). We are indebted to Ben Greiner, Sylvia Schikora, and Volker Zieman for their research assistance.
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    References listed on IDEAS

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    1. Rubinstein, Ariel, 1982. "Perfect Equilibrium in a Bargaining Model," Econometrica, Econometric Society, vol. 50(1), pages 97-109, January.
    2. Harsanyi, John C, 1995. "Games with Incomplete Information," American Economic Review, American Economic Association, vol. 85(3), pages 291-303, June.
    3. Guth, Werner & Tietz, Reinhard, 1990. "Ultimatum bargaining behavior : A survey and comparison of experimental results," Journal of Economic Psychology, Elsevier, vol. 11(3), pages 417-449, September.
    4. Roth, Alvin E & Murnighan, J Keith & Schoumaker, Francoise, 1988. "The Deadline Effect in Bargaining: Some Experimental Evidence," American Economic Review, American Economic Association, vol. 78(4), pages 806-823, September.
    5. John C. Harsanyi & Reinhard Selten, 1972. "A Generalized Nash Solution for Two-Person Bargaining Games with Incomplete Information," Management Science, INFORMS, vol. 18(5-Part-2), pages 80-106, January.
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    Cited by:

    1. Dan Ariely & Axel Ockenfels & Alvin E. Roth, 2005. "An Experimental Analysis of Ending Rules in Internet Auctions," RAND Journal of Economics, The RAND Corporation, vol. 36(4), pages 890-907, Winter.
    2. Gneezy, Uri & Haruvy, Ernan & Roth, Alvin E., 2003. "Bargaining under a deadline: evidence from the reverse ultimatum game," Games and Economic Behavior, Elsevier, vol. 45(2), pages 347-368, November.

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    More about this item

    Keywords

    Ultimatum game; Conflict resolution; Decreasing pie; Sniping;
    All these keywords.

    JEL classification:

    • C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General
    • C90 - Mathematical and Quantitative Methods - - Design of Experiments - - - General
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions

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